Hedge fund industry assets are on the rise for the first time in a year as redemptions slowed and performance soared.

Assets in the world’s 8,900 hedge funds rose $100 billion in the second quarter, Hedge Fund Research reports. It’s the first quarterly increase in assets the industry has seen since the second quarter of last year, when industry assets hit $1.93 trillion. Since then, the economic crisis has taken its toll on hedge funds in a big way; the industry now manages just $1.43 trillion.

How’d they do it? Investors certainly aren’t flocking back to hedge funds. Instead, the increase was driven by strong performance. The average hedge fund rose nearly 10% in the first half, according to most industry indices, more than offsetting the slowing withdrawals from hedge funds.

Investors yanked $42.8 billion from hedge funds, less than half the $103 billion redeemed in the first quarter and less than one-third of the record $152 billion pulled in the fourth quarter of last year. Fund of hedge funds clients withdrew $33 billion in the quarter; funds of funds now manage $530 billion.

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